Police identify victims of cryptocurrency fraud

By Alejandra Pulido-Guzman - Lethbridge Herald on March 21, 2024.

LETHBRIDGE HERALDapulido@lethbridgeherald.com

Hundreds of Canadians were recently identified as cryptocurrency related crime victims by a collaborative effort between multiple law enforcement agencies including the Lethbridge Police Services.
Representatives from law enforcement agencies including the RCMP, the Lethbridge Police Service, the Delta Police Department, Homeland Security Investigations, and cryptocurrency exchanges NDAX and Binance took part of the investigation.
During a private workshop ‘Operation Disruption’, hosted by the Calgary Police Service and blockchain data company Chainalysis, officers identified more than 770 victims of cryptocurrency fraud world-wide, where 119 were from Canada, with an estimated combined loss of $59 million.
Sgt. Kevin Talbot, who heads the LPS Economic Crimes Unit and was one of the officers involved in the workshop spoke to reporters on Wednesday about it.
“With this operation Calgary Police Service collaborated with Chainalysis and brought together multiple tracers from across Western Canada, approximately 12 of us and they brought us into the room and they introduced us to a new type of scam that’s occurring,” said Talbot.
He said the new scam is called “approval phishing” which has been increasingly used by romance and investment scammers and poses a significant threat to individuals engaging in cryptocurrency transactions.
“We identified several victims that didn’t even know they’re being victimized, they thought they were involved in something that was legitimate and through the heuristics of the types of transactions that we saw, we were able to tell that they were being victimized,” said Talbot.
 He said from there they confirmed it with exchanges, they did their investigation and they agreed they in fact appeared to be victims and then they contacted the victims to have them stop sending any sort of money to the scammer and gave them information on how to prevent this from happening any further.
“When it comes to cryptocurrency transactions your funds could be going anywhere in the world, it’s not difficult for us to trace it to an exchange, where cryptocurrency is cashed out, but beyond the exchange what they do with it from there we rely on the cooperation of the exchanges,” said Talbot.  
He said if it is an exchange that is friendly with police, they will respond to a Canadian production order and provide them with information of where the money went to after their exchange and they can also identify who that client is, and this way the police can track a suspect.
“With respect to seizures, same thing, we have to identify where it went and then we have to work with exchanges, so it can be difficult because often the money has been cashed out somewhere and it can be difficult, it’s not impossible but it is a challenge to identify actual suspects,” said Talbot.
When asked for advice on how to prevent becoming a victim of a cryptocurrency scam Talbot said to not trust people you do not know in person was the first thing people should be aware of.
 “Don’t send money to anybody you don’t know, if you haven’t personally met them and taking the steps to trust them, don’t send money to anyone,” added Talbot.
He said this applies to any scam online, if you do not know the person do not share any personal information with them and definitely do not send them money regardless of the currency.
“The way cryptocurrency transactions occur are all virtual, there isn’t actually a cryptocurrency that you can pick up and put in your pocket. Transactions are done through a series of computers around the world and these people in control of these computers agreed to be a part of the blockchain,” said Talbot.
He explained that unlike a bank transaction like an e-transfer, which sometimes takes time to clear out of your account and you are able to stop or even reverse, cryptocurrency transactions are immediate and unable to be reversed.
Talbot said those who find themselves victims of cryptocurrency related scams and have suffer a financial loss should always report it to the police, as well as taking other steps to prevent further loss including:
-Visit the Alberta Securities Commission website for cryptocurrency investment tips.
-Visit the Chainalysis website for more details on ‘approval phishing’ scams.
-If you have received a fraudulent text message, email or phone call but have not sustained a financial loss, please report it to the Canadian Anti-Fraud Centre.

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